How to Understand the SLED Cooperative Purchasing Market Landscape

Cooperative purchasing is an important segment of government contracting to understand for any business that sells to state, local and education (SLED) government entities.

The team of analysts behind Deltek’s GovWin IQ government market intelligence solution are experts on SLED contracting, and in their most recent state and local procurement snapshot report, they offered a special feature exploring the concept of cooperative purchasing in the SLED market. This blog post summarizes that special feature while showing companies how to leverage these contracts and work effectively with co-ops.

What is the Definition of Cooperative Purchasing?

Cooperative purchasing lets SLED governments use existing contracts from a third-party organization instead of issuing new RFPs. The contracts are awarded in accordance with all state procurement laws for fair and open competition. A cooperative organization offers pre-existing public contracts for various goods and services to its members, who are SLED buyers. Governments need to join a co-op before buying from it.

There are two types of cooperatives:

• Regional cooperatives, which limit membership to certain areas
• National cooperatives, which are open to any government member regardless of location

Co-ops differ in ownership, scope, industry, and procurement models. They are often formed by government officials but operate independently of any one specific government entity.

Cooperative Purchasing Benefits for Both Buyer and Seller

Businesses benefit from marketing and sales efficiency of only competing once to secure a predictable longer-term source of sales from many governments and types of buyers. Working with cooperatives can come with other benefits, such as gaining access to marketing assistance services, making it easier to find government contracts, and having the ability to connect with a list of member governments to contact for sales.

For governments, cooperatives can help to relieve or avoid traditional procurement challenges by outsourcing the solicitation process to save time and money, select proven solutions and potentially reduce risk.

How Governments Use Cooperative Purchasing

GovWin's SLED Market Analysis team estimates that sales through national cooperative organizations will reach $64.7 billion by 2025 – and these purchases come from all levels of SLED government and cover a wide variety of different products and services.

Share of Cooperative Purchases by Government Segment

The graph below shows the percentage of cooperative purchases by different types of government entities since 2014.

K-12 schools had the highest share among government types, with about 25% of all cooperative purchases. This data is consistent with their known preference for using cooperative contracts. State governments and cities were the next highest with similarly large shares of 20-24%. Cities rely on co-ops due to their lack of purchasing power while state governments use them to help cope with their scale and need for greater efficiency.

Top Cooperative Products and Services

To delve into more specifics and look beyond industries, the GovWin research team examined which specific products and services are being purchased the most from cooperative contracts, leveraging GovWin’s powerful Smart Tags that make it easy to identify opportunities in any market.

The results showed that national co-ops had vaccines and medical supplies as their top purchases, aligning with a greater propensity of state governments to use them for healthcare. And for regional co-ops we saw cellular telephone services and fire protection vehicles rank highly, which is in line with local governments prioritizing public safety industry-related purchases over other types as well.

Further Government Cooperative Purchasing Research

If your business is ready to become more involved in cooperative purchasing, you may need to ask yourself, can your business deliver in a timely manner with consistent pricing and terms? And do you have a network of cooperatives to whom you can reach out about finding solicitations or upcoming expiring contracts? If not, you may want to consider a tool that can help.

By tracking and examining the entire range of industries and governments in SLED government contracting, GovWin IQ helps all types of businesses selling to the government understand the market trends and plan their sales and marketing strategies effectively.

Click here to learn more about GovWin IQ, or click the link below to download your copy of GovWin’s full report on cooperative procurement in SLED government.